Kelly Hibbs: Yes, good question, Mike. So yes, I mean, currently, in the first quarter, we were, I guess, right around 37% of the mix. Obviously, price could influence the ultimate, how big that piece of the sales pie is. I think at the end of the day, I think we would still probably be in the mid- to low 30s when we fully execute our strategy. But we’re not — but as we’ve said many times, we’re not exiting commodity. We’re good at it. We like it. The return on invested capital is really good.
Jeff Strom: I’m just going to add to that. We absolutely have the commodity business. Now the last few weeks of print hasn’t been fun. But if that share is going to go down a little bit, it’s just because of the growth in the other categories. But the commodity business has been good to us, our customers rely on us, and we’re going to start right in there with it.
Kelly Hibbs: Yes. And I guess I would just follow, a really good commodity sales team, great awareness of our data, and I look forward to kind of seeing how they how they navigate us through this near-term period we’re working through.
Mike Roxland: Got it. One last question I’ll just tie and I’ll turn it over. Just, Kelly, you mentioned that your EWP volume growth this quarter exceeded the single-family start increases. Given that 80% to 85% EWP correlation to single family, where do those additional volumes had, especially given the weakness in multifamily?
Kelly Hibbs: Yes. So our volumes were heavy to single, Mike. I guess I didn’t quite follow the balance of that question. Can you hear me again, please?
Mike Roxland: Sure, sure. No well. I mean so you said your EWP volumes exceeded the amount that you — of the single-family start increases. So I guess what I’m getting at is given the fact that you have 80% to 85% of EWP goes towards single-family. What other categories did you see growth in that absorbs some of your EWP volume?
Kelly Hibbs: Yes. I mean I can’t point to it specifically, this is a bit anecdotal, for sure, but I feel really good about our ability to capture share given our – given the nice job on the manufacturing side and then also having the benefit of having a leading national distributor, I think, shows up well and helps us capture share.
Operator: Our next question comes from George Staphos of Bank of America Securities.
Lucas Hudson: This is actually Lucas Hudson on for George Staphos. He is currently traveling right now. So first and foremost, thanks for the details. My first question is, what is your outlook for repair-and-remodel? And is there more momentum in do yourself projects or pro contractor? And what are the implications for BMD and Wood?
Nate Jorgensen: Lucas, it’s Nate. Maybe just — I think the theme, as we kind of described in our opening remarks is that repair and remodel has come off a bit, but it’s still historically kind of above where trends shift typically are. I would say that the pro side of repair-and-remodel still is good and pretty steady, maybe relative to the weekend, the over to the shoulder crowd. So I think the overall view of repair-and-remodel is good. And I think the backdrop in terms of that, again, that aging housing stock, homeowner equity, there’s still a good foundation there for them to work on. So Again, while it’s off from what we experienced maybe over the last 12, 24 months, it still represents, I think, an important opportunity for our company on a range of products and services.
Lucas Hudson: That’s great color. Just a quick follow-up as well. Was BMD revenue better than initially expected? And if so, what created that positive variance?
Kelly Hibbs: I would say BMD’s revenue probably came out pretty consistent with what our expectations were. I think the quarter started slower than we would have anticipated, and it finished very strong in March.
Operator: Our next call comes from the line of Ketan Mamtora of BMO.
Ketan Mamtora: First question, just following off on that. The strength that you saw in March, has that continued into April as well? Any additional color you can provide on that?
Kelly Hibbs: Yes, sure, Ketan. And so — so yes, March was very strong. As I alluded to in the prepared comments, the sales pace for BMD was off slightly in April compared to March, but still at healthy levels. And then in terms of — on the Wood Products manufacturing side, feeling good about the momentum in EWP, it continues to be solid. It might be a little bit weaker than what we would have anticipated, but still is solid as we head into May here.
Ketan Mamtora: Got it. That’s helpful. And then, Kelly, when you talked about in BMD, daily sales being up 5% sequentially. Are there any shipping day differences that we should be mindful of between Q1 and Q2?
Kelly Hibbs: Yes, I would have factored those into my math I gave you, Ketan, but we — there are 64 workdays in both first and second quarter.
Ketan Mamtora: Got it. So if that’s the case, that would still imply BMD to be down versus last year’s second quarter, if I’m just doing my math correctly?
Kelly Hibbs: Yes, that’s fair. If we maintain the sales pace — the same pace we’ve had in April, that would be true. Now — but we will see how May and June plays out as we continue to see seasonally better weather and see what the ultimate activity pace, activity you run in housing is. But yes, you have the right question there.
Ketan Mamtora: Got it. And then just one last one from me. On the margin side, we talked about some margin pressure, some price pressure from EWP, OSP going down here recently, plywood, maybe. But then you also have just seasonally sort of volume leverage in Q2. As we think about margins, how would you sort of weigh in those factors as it relates to Q1’s 5.6% margin?
Kelly Hibbs: Yes. So April margins were healthy. They were good. May is going to be the discovery period here around commodity prices as we’ve talked. So we do expect some pressure here in May. And to the extent of it, we’ll depend on the duration of the weakness we’ve seen. But fundamentally, it doesn’t change. While we might get some pressure here in the second quarter because of the commodity market. We still feel good about kind of the underlying earnings capability of BMD moving forward to be consistent with what we’ve been putting up of late.
